Loading judgment…
Facts
The assessee did not file the return of income for AY 2019-20. The Assessing Officer reopened the case and made additions of Rs. 71,78,553/- as unexplained money and Rs. 19,662/- as undisclosed interest income. The assessee did not comply with notices issued by the AO and the CIT(A).
Held
The Tribunal noted the assessee's non-cooperation but found that the CIT(A) confirmed the addition without a proper hearing. The Tribunal decided to provide another opportunity to the assessee, subject to payment of costs.
Key Issues
Whether the assessee's appeal should be allowed to be heard on merits despite prior non-cooperation, considering the principles of natural justice.
Sections Cited
69A, 250, 147, 148
AI-generated summary — verify with the full judgment below
Before: SHRI T. R. SENTHIL KUMAR & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 12.06.2025 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2019-20.
The grounds of appeal
raised by the assessee are as under: “1. The Ld. CIT(A), NFAC has erred and was not just and proper on the facts of the case and in law in confirming the addition of Rs.71,78,553/- u/s 69A of the Income Tax Act.
2. PRAYER: 2.1 The addition made by Ld Assessing Officer and confirmed the Ld. CIT(A) – NFAC may be kindly deleted. 2.2 Personal hearing may be granted. 2.3 Any other relief that your honours may deem fit may be granted.
/AY.2019-20 Nazerabibi Nadeem Shama 3. The appellant craves leave to add, amend, alter or delete any or all of the above grounds of appeal s.”
3. Brief facts of the case are that the assessee did not file the return of income for AY 2019-20. Based on the information available with the Department, the case was reopened ul/s 147 of the Act after recording reasons. Notice u/s 148 of the Act was issued and served to the assessee. In response, the assessee did not file return of income. The Assessing Officer (in short, ‘AO’) observed that the assessee had income chargeable to tax amounting to Rs.32,15,712/-. The AO issued four notices, but the assessee did not comply. From the information received from the bank, the AO observed that the assessee deposited cash of Rs.9,02,000/- and there were, other credits of Rs.62,76,553/- and interest income of Rs. 19,662/-. Subsequently, the AO issued final show-cause notice on 22.03.2024. The appellant neither filed return of income nor furnished any documents. Since, the appellant had not filed the return of income, the AO treated Rs. 19,662/- as undisclosed interest income, Rs.71,78,553/- as unexplained money u/s 69A of the Act and added it to the total income of the assessee.
4. Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). The CIT(A) issued four notices of hearing on 13.03.2025, 28.04.2025, 14.05.2025 and 30.05.2025, but there was non-compliance on the part of the appellant. The appellant neither filed any details nor sought adjournment. The CIT(A) held that the appellant is not interested in pursuing the appeal. He relied on the decision of Hon’ble Supreme Cour in cases of B.N. Bhattacharjee /AY.2019-20 Nazerabibi Nadeem Shama and Another, 118 ITR 461, M/s Chemipol vs. UOI, Excise Appeal No.62 of 2009 (Bom - HC). The appellant had also not been able to discharge the primary onus/burden statutorily and judicially cast upon him to substantiate the claims made in his appeal. He held that the appellant did not comply to any of the notices during the assessment proceedings and failed to submit necessary evidences about the cash deposit, other credits and interest income before AO. The CIT(A) confirmed the addition made by AO and dismissed the appeal of the assessee.
5. Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee filed a paper book and submitted that details and documents were filed before AO. He further submitted that the CIT(A) passed the order u/s 250 of the Act on 12.06.2023 without hearing the assessee in violation of the principles of natural justice. The ld. AR contended that assessee could not represent his case before the AO and CIT(A) and the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the CIT(A) due to circumstances beyond his control. The Id. AR contended that one more opportunity should be given to the assessee to plead his case before the AO.
6. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) supported the order of lower authorities. He submitted that the adequate opportunities were given to the assessee during the appellate /AY.2019-20 Nazerabibi Nadeem Shama proceedings. The assessee has been negligent and non-cooperative due to which the additions were confirmed by CIT(A). However, he did not have any objection if the matter is restored to the file of CIT(A).
We have heard both the parties and perused the materials available on record. It is an undisputed fact that assessee has been totally non- cooperative during the appellate proceedings. The addition was confirmed by CIT(A) based on the assessment order and not on merits. However, we find that the CIT(A) had issued four notices which were not complied with by the assessee. The ld. AR also requested for admitting the additional evidences. He submitted that the appellant had no occasion to attend before the AO, as the notice were not received. However, we find that the show cause notice issued by AO was received by the appellant and the same was responded by asking time for preparation and submission. However, the assessment order was passed without allowing further time. Considering all these facts, we are of the view that the assessee was negligent and non-cooperative before the lower authorities. The Id. AR submitted that the non-compliance was neither deliberate nor intentional. He requested that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examine the entire issue afresh subject to payment of cost of Rs.5,000/- /AY.2019-20 Nazerabibi Nadeem Shama (Rupees five thousand only) by the assessee to the credit of the “Prime Minister’s National Relief Fund” within one month from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO for fresh adjudication along with the additional evidences in accordance with law after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the CIT(A) by not seeking adjournment without valid reasons.
In the result, appeal of the assessee is allowed for statistical purpose. Order is pronounced in terms of provisions of Rule 34 of ITAT Rules on 02/12/2025.